Group discusses Citizens reforms

A task force meeting at UCF considers proposals that would include dropping expensive coastal homes.

January 31, 2006|By Kathy Bushouse, South Florida Sun-Sentinel

Legislators would be asked to keep owners of million-dollar-plus coastal homes from getting homeowner insurance coverage from Citizens Property Insurance Corp. as part of a series of recommendations being weighed by a statewide insurance task force.

The $1 million cap on insured value is one of a number of sweeping recommendations in a 28-page draft report to overhaul Florida's troubled insurance market. Other suggestions would:

Give some Citizens' policyholders three to five years to retrofit their homes so they can find insurance policies from private companies;

Create grants and low-interest loans that people can tap to fortify their homes to prevent hurricane damage;

Study the impact of reducing eligibility for Citizens' coverage to homes with insured value of less than $500,000.

The state's task force convened Monday at the University of Central Florida for two days of discussion on its draft report, which should be finalized next month and sent to the Legislature. The group includes state officials, insurance experts and other industry representatives.

Cutting the number of homes it insures for more than $1 million would help, said Susanne Murphy, Citizens' corporate counsel. The company has more than 6,000 homes insured for more than $1 million, and shifting those policies to private insurers would reduce Citizens' exposure by $900 million, Murphy said.

Ultimately, that could mean the company would be able to cover its losses without assessing all of Florida's policyholders. A $516 million shortfall in Citizens' high-risk account after the 2004 hurricane season meant that all policyholders in the state paid to make up the company's losses.